I want my clients to keep a good set of books so that I can help them make good decisions. I also want them to have as few barriers to getting that system running as possible, including the excuse of how costly it is. This is where Wave has given me an opportunity to recommend a quality product to get my clients organized and help us work together more effectively.

Goal: Give small businesses the tools they need to run their business at the best price point possible: Free.

Pros:

Free (and intends to stay that way!)

Balance sheet and profit and loss reports

Export reports to Excel

Banking integration (import transactions automatically)

Bank reconciliation (feature in progress)

Can make general journal entries to adjust your books (or for your accountant to adjust them)

Transaction splitting

Send and track invoices

Accounts payable tracking

Accept payments with integrated payment processing

Integrated payroll tools

Free multiple user access (Read only or Edit access available)

Special accountant user role for your external accountant

Attach receipts to transactions (can add right from the camera on your phone)

Multiple businesses under one user login

Premium services and support at reasonable cost

Find a Pro to find an accountant that uses Wave

Integrate with Shoeboxed, Etsy, and PayPal

Foreign currency considerations

Cons:

Reports sometimes look funny. It’s a Canadian company which explains some of it.

No account numbers in the chart of accounts

No control over ordering of accounts on Income Statement

Cannot show multiple periods side by side in reports (no comparing to last year)

No report customization

No equivalent to “Classes” in QuickBooks

I would rather classify my transactions between accounts than use the “transfer” feature

Difficult to troubleshoot why my balance sheet balance does not agree to the imported bank balance in the dashboard (this is why a bank reconciliation is so desperately needed)

Only 2 user role options: view or edit

Stops categorizing transactions if you are inconsistent with the vendor (for instance if you categorize Wal-Mart as both Groceries and Hardware)

Summary

I have used Wave to track my personal expenses for several years and will continue to do so. I like the banking integration and the fact that it’s free and has all intent to remain that way. I like the way that they are using advertising and premium services in their revenue model to keep the basic product free. I’m interested to see how well the bank reconciliation feature works. I do recommend Wave to some of my clients that are struggling to total up their spreadsheets at the end of the year and can’t bring themselves to pay anything for software that they think just makes my job easier.

The style of Wave reports has always annoyed me a bit as well as the fact that expense accounts on the Income Statement seem to have no particular order. I have asked customer support to ad comparative reports and they told me to export both periods to Excel and do it myself. I would really like some type of report builder so that I could make reports that the development team doesn’t think are important.

If you have a relatively simple business that doesn’t need to track divisions or profit centers, Wave may be an application that will suit your needs. The fact that it includes a Balance Sheet in its reporting makes it usable even if your business is organized as a corporation or partnership and needs to report a Balance Sheet for tax purposes.

Freshbooks was not intended to be an accounting system. Freshbooks still claims to not be an “accounting package” although it allows you to produce a profit and loss statement for your business by entering non-billable expenses as well as billable expenses into the system (in other words, you can track all your expenses, not just those you want to flow through an invoice). If every sale you make is invoiced through Freshbooks, then you already have your complete income into the system and bingo, a complete profit and loss to help you prepare your Schedule C.

Goal: Invoicing, billable time and expense tracking, team time tracking and management and multiple currency support.

The invoices produced are very professional and uniform even on the free account

Creation of estimates to help you plan the project

Able to accept payments online

Cons:

Really encourages only billable expenses reported on invoices for input – the profit and loss report, should really be renamed the gross profit report

Itemizing and billing expenses in this way may make you look petty (nickel and dime the client to death), but if you are involved in litigation or governmental contracting, this detail could be great

No cash reconciliation, must be performed outside the system

No way to record expenses in a way that doesn’t impact the profit/loss statement (for capital expenditures or personal draws)

Freshbooks doesn’t really want to be your sole accounting system and has no intention of addressing any of the basic accounting system functionality it lacks. However, if the choice is between this and a box of receipts, I’d much rather see this and it also helps you get paid. Excel might enable you to produce a similar profit and loss, but it won’t email invoices to your clients with a PayPal PayNow button.

B2Bee is a simple bookkeeping solution aimed at helping professionals with a low transaction volume prepare invoices and track their income and expenses. Both income and expenses can be tracked by client and by project, enabling you to quickly create a nicely detailed invoice for your clients.

Invoices can be emailed – your client will receive a link to view the invoice securely on the B2Bee website

Project tracking for invoice detail

Team management options for projects

Simple, but preferable report options with a profit and loss schedule as well as an export of transaction detail for the accountant

Cons:

No transaction importing – each must be entered manually (thus the focus on low transaction volume)

No predefined categories (accounts) in the drop down for expenses

No integrated time tracking

Currently no integrations with other applications

No provision for payment with the invoice (such as a PayPal, PayNow button)

No place to record capital expenditures, transfers, capital contributions/draws, etc., as to not effect the profit and loss statement

No bank reconciliation integrated in the system

B2Bee is another application that is definitely a step up from Excel spreadsheets and green ledgers, but lacks much in the way of advanced features. Sticking to my model of keeping your bookkeeping as simple as possible, B2Bee may very well provide sufficient information for your management needs and your accountant’s reporting needs without a lot of complex clutter to make messing up your books easier.

I would really like to see the expense category list populated with the basic Schedule C expenses as B2Bee’s focus is on the Schedule C filer and this would help transition the books to the Schedule C at the end of the year without as much rearranging.

The nice thing here for a business with low transaction volume is that you get two major functions under one roof: invoicing and accounting. Especially if you bill your projects at a fixed rate and don’t need to track your time, B2Bee may have all the functionality you need without a lot of winding paths to lead you astray.

Outright is a simple, straightforward, and free accounting package geared towards Schedule C filers. Outright will keep a cash basis profit and loss and also help you generate what i would call a ‘preliminary’ Schedule C to aid you (or your accountant) in filing your taxes.

Goal: Focus on maintaining cash basis income and expense records with minimal accounting experience to provide accurate records for tax estimation and preparation.

May mislead you that your Sch C is correct – you can still mess up this system in several ways: Capital Expenses, Depreciation, Amortization, etc. – fixed asset expenditures cannot be input in a way that does not show up as an expense, draws don’t have an equity account to put them to, etc.

Limited manual import options – must import income and expenses separately according to a preset form (does not take the standard manual imports that most banks offer)

The cash basis, without consideration for accounts receivable or accounts payable, may mislead you about your actual financial position in any given period

Summary

Outright is definitely a step up from using and Excel spreadsheet to track your income and expenses (and leaps and bounds above using green ledger books). The simplicity of the system may make it preferable to Quickbooks for many Schedule C filers as you don’t have to sift through a lot of the clutter to get to the information that you actually need.

If Outright is capable of providing you all of the information that you want and need, I would consider the lack of advanced features to be a plus as there are less ways to make a mess of the books that will take additional time and effort to clean up at the end of the year.